The decline in Ripple’s (XRP) foreign exchange reserves compared to last year appears to have bottomed out. It stabilized around 2.75 billion tokens, with the price hovering around $1.40 in April.
AMBCrypto indicated that this represented an easing of selling pressure.
The decrease in large whale activity and a shift to normal activity also suggests that aggressive accumulation has stalled.
The market was likely to be influenced by retail players, and an uptick in spot ETF flows could also have a positive impact on XRP price trends, as was the case in mid-April.
When trying to determine whether accumulation or selling pressure had the upper hand, some on-chain metrics seemed to give mixed signals.
XRP: sellers still have the upper hand
In an article on CryptoQuant Insights, analyst Arab Chain drew attention to the growing activity of the XRP network. Activity was trending downward until mid-April, when it made a sharp turnaround and has steadily increased over the past three weeks.
At the end of March and the first half of April, XRP prices rose from $1.45 to $1.30 and stayed there for almost two weeks. During this period, the amount of withdrawal transactions over 30 days exceeded the number of deposit transactions.
This trend of many withdrawals continued in May, but in recent days deposit transactions have taken a slight advantage.
This meant that although the number of trades increased, withdrawals slowed, indicating potential selling pressure.
Change in net exchange position also measures the 30-day change in supply held in wallet addresses. A positive change in supply indicates that there are more token flows in than out, which in turn indicates increased potential selling pressure.
In the six days since Thursday, April 30, XRP has increased by 4.25% to $1.42.
On April 17, the altcoin momentarily reached a local high of $1.51. Since February, the $1.5-1.6 zone has acted as a supply zone. XRP’s temporary foray into this resistance zone was accompanied by a sharp rise in Coin Days Destroyed and a retracement to $1.36.
At the time of writing, the CDD indicator remained low, meaning the sales wave has not yet started.
Although foreign exchange reserves are stable, the positive net position development and slightly higher deposit transactions, combined with the $1.5 supply zone, mean that XRP could see another round of selling in the near term.
Final Summary
- XRP exchange reserves have stabilized in recent months.
- The current approach to the overhead supply zone, combined with potential near-term selling pressure, meant that XRP would struggle to maintain its momentum.
